Government bring in law to protect tips for staff after 'service charge' confusion

From next month, staff in hospitality businesses will have their tips protected under a new law to be introduced by the Government.

The Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 will come into effect on December 1.

The new law will give staff and employees a legal requirement to receive tips and gratuities paid in electronic form.

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It also states that the tips and gratuities should be paid in a manner that is far - including the 'service charge' which appears automatically on bills and receipts around Ireland.

Any charge called a service charge, or a charge which would lead a customer to believe it is for service, will now have to be distributed to staff as if it were a tip.

Welcoming the commencement of the Act, the Tánaiste Leo Varadkar said: "Tips can form a significant percentage of a worker’s take-home pay and these changes go a long way to ensuring those tips are distributed to the people who have earned them.

"This new law is a positive step towards improving the rights and entitlements of lower-paid workers as well as providing transparency for customers. While most employers treat their staff fairly, this will help to stamp out bad practices where they exist and give customers the confidence that gratuities are paid to staff.”

This new law adds to other workers’ rights that the Government is introducing, which include Statutory Sick Pay, a new Public Holiday in February, the forthcoming Right to Request Remote Work and the move to a National Living Wage.

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